1 unchanged sentence
Evaluation of Disclosure Controls and Procedures
−Removed: The Company’s disclosure controls and procedures are designed to ensure that information required to be disclosed by the Company in the reports that the Company files or submits under the Exchange Act, is recorded, processed, summarized, and reported within the time periods specified in the Securities Exchange Commission's (“SEC”) rules and forms, and that such information is accumulated and communicated to management, including its Global Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), as appropriate to allow timely decisions regarding required disclosure.
−Removed: Based on an evaluation of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act), the Company’s Global Chief Executive Officer Yueting Jia and CFO Koti Meka (Principal Executive Officer and Principal Financial and Accounting Officer , respectively) have concluded that the Company’s disclosure controls and procedures were not effective as of March 31, 2026 due to a remaining material weakness related to the design and maintenance of formal accounting policies and procedures, described below.
−Removed: Material Weakness in Internal Control Over Financial Reporting
+Added: The Company’s disclosure controls and procedures are designed to ensure that information required to be disclosed by the Company in the reports that the Company files or submits under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission’s (“SEC”) rules and forms, and that such information is accumulated and communicated to management, including its Global Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), as appropriate to allow timely decisions regarding required disclosure.
+Added: Based on an evaluation of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act), the Company’s Global Chief Executive Officer Yueting Jia and CFO Koti Meka (Principal Executive Officer and Principal Financial and Accounting Officer, respectively) have concluded that the Company’s disclosure controls and procedures were not effective as of June 30, 2026 due to three material weaknesses in internal control over financial reporting related to (i) the identification, evaluation, and accounting for certain non-routine, unusual, or complex transactions, (ii) the design and maintenance of formal accounting policies, procedures, and financial reporting controls, and (iii) the identification, evaluation, accounting for, and disclosure of certain related-party arrangements and transactions, as described below.
+Added: Material Weaknesses in Internal Control Over Financial Reporting
The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined under Rule 13a-15(f) under the Exchange Act.
−Removed: As of December 31, 2024 (“FY24”), the Company identified nine material weaknesses in its internal control over financial reporting.
−Removed: A material weakness is a deficiency, or combination of deficiencies, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements would not be prevented or detected on a timely basis.
−Removed: The Company has made substantial progress in remediating the previously identified material weaknesses in internal control over financial reporting.
−Removed: During 2025 (“FY25”), management designed and implemented internal controls remediating eight of the nine material weaknesses listed below:
−Removed: • Ineffective control environment commensurate with the Company’s financial reporting requirements;
−Removed: • Ineffective controls addressing risks of material misstatement;
−Removed: • Ineffective communication and information-sharing controls among the legal, capital markets, accounting, and finance functions;
−Removed: • Ineffective controls over the identification and accounting for certain non-routine, unusual, or complex transactions;
−Removed: • Ineffective information technology (“IT”) general controls relevant to financial reporting;
−Removed: • Ineffective controls related to maintaining integrity and ethical values within the control environment;
−Removed: • Ineffective controls over the identification and disclosure of certain related-party arrangements and transactions;
−Removed: • Lack of formal cybersecurity incident reporting procedures to ensure material incidents were communicated to the Board of Directors.
+Added: A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim consolidated financial statements would not be prevented or detected on a timely basis.
+Added: As of June 30, 2026, the Company identified the following material weaknesses:
+Added: • Non-routine, unusual, or complex transactions:
+Added: The Company did not design and maintain effective controls to identify, evaluate, and appropriately account for certain non-routine, unusual, or complex transactions, including the proper application of generally accepted accounting principles (“GAAP”) to such transactions.
+Added: • Accounting policies, procedures, and financial reporting:
+Added: The Company did not design and maintain formal accounting policies, procedures, and controls necessary to ensure the completeness, accuracy, and timeliness of its financial accounting, reporting, and disclosures.
+Added: • Related-party transactions:
+Added: The Company did not design and maintain effective controls to identify, evaluate, and appropriately account for and disclose certain arrangements and transactions with related parties.
Remediation Plan for Material Weaknesses in Internal Control Over Financial Reporting
−Removed: In 2026, management will continue to monitor and test controls related to the material weaknesses to ensure they operate effectively over a sustained period.
−Removed: To address the remaining material weakness, the Company intends to continue its remediation efforts through the further development and formalization of accounting policies, procedures.
+Added: The Company remains committed to addressing the material weaknesses in its internal control over financial reporting and strengthening its overall control environment.
+Added: Management has initiated and continues to implement remediation efforts, including the following:
+Added: • Non-routine, unusual, or complex transactions:
+Added: The Company is designing and implementing controls to enhance the identification, evaluation, and accounting for certain non-routine, unusual, or complex transactions, including the appropriate application of GAAP.
+Added: • Accounting policies, procedures, and financial reporting:
+Added: The Company is formalizing and enhancing its accounting policies and procedures.
These efforts include working with third-party consultants and technical accounting advisors to assist with the documentation and enhancement of accounting policies and procedures.
−Removed: In the interim, the Company has implemented compensating controls, including enhanced management review procedures and formal accounting memoranda for significant and complex transactions.
−Removed: The Company will continue to monitor and test these controls to evaluate their ongoing effectiveness.
−Removed: However, if remediation efforts are not successfully sustained, the effectiveness of the Company’s internal control over financial reporting could be adversely affected.
+Added: In the interim, the Company has implemented compensating controls, including enhanced management review procedures and the preparation of formal accounting memoranda for significant and complex transactions.
+Added: • Related-party transactions:
+Added: The Company has implemented and continues to enhance controls over related-party transactions, including regular management attestations, to strengthen the identification, evaluation, and disclosure of related-party arrangements and transactions.
+Added: The Company will continue to monitor the design and operating effectiveness of these controls and assess whether the remediation efforts are successfully implemented and sustained over an appropriate period of time.
+Added: However, if remediation efforts are not successfully implemented and sustained, the effectiveness of the Company’s internal control over financial reporting could be adversely affected.
+Added: The material weaknesses will not be considered remediated until management has completed its remediation efforts and concluded, through appropriate testing, that the applicable controls are designed and operating effectively for a sufficient period of time.
Internal controls are inherently subject to limitations, including human error, management judgment, resource constraints, and the risk of fraud.
4 unchanged sentences
Changes in Internal Control Over Financial Reporting
−Removed: Other than the ongoing remediation activities described above, there have been no changes in the Company’s internal control over financial reporting during the three months ended March 31, 2026, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
+Added: Other than the ongoing remediation activities described above, there have been no changes in the Company’s internal control over financial reporting during the three and six months ended June 30, 2026, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
PART II—OTHER INFORMATION
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.